Glossary

• Annual survey

  The inspection of a vessel pursuant to international conventions, by a classification society surveyor, on behalf of the flag state, that takes place every year.

• Bunker fuel

  Heavy fuel and diesel oil used to power a vessel’s engines.

• Bareboat charter

  A charter of a vessel under which the ship owner is usually paid a fixed amount of charterhire for a certain period of time during which the charterer is responsible for the vessel operating expenses and voyage expenses of the vessel and for the management of the vessel, including crewing. A bareboat charter is also known as a “demise charter” or a “time charter by demise”.

• Charterhire

  A sum of money paid to the ship owner by a charterer for the use of a vessel. Charter-hire paid under a voyage charter is also known as “freight”.

• Classification society

  An independent society that certifies that a vessel has been built and maintained according to the society’s rules for that type of vessel and complies with the applicable rules and regulations of the country of the vessel’s registry and the international conventions of which that country is a member. A vessel that receives its certification is referred to as being “in-class”.

• Clean products

  Liquid products refined from crude oil, whose colour is less than or equal to 2.5 on the National Petroleum Association scale. Clean products include naphtha, jet fuel, gasoline and diesel/gasoil.

• Charterer

  The party that hires a vessel for a period of time or for a voyage.

• Contract of Affreightment or COA

  An agreement between an owner and a charterer which obliges the owner to provide a vessel to the charterer to move specific quantities of cargo over a stated time period but without designating specific vessels or voyage schedules, thereby providing the owner with greater operating flexibility than with voyage charters alone.

• Charter

  The hire of a vessel for a specified period of time or to carry a cargo from a loading port to a discharging port. The contract for a charter is commonly called a charterparty.

• Charterhire

  A sum of money paid to the ship owner by a charterer for the use of a vessel. Charter-hire paid under a voyage charter is also known as “freight”.

• Dwt

  Deadweight tonne, which is a unit of a vessel’s capacity for cargo, fuel, oil, stores and crew measured in metric tonnes of 1,000 kilograms.

• Double hull

  A hull construction design in which a vessel has an inner and outer side and bottom separated by void space.

• Dirty products

  Liquid products refined from crude oil, whose colour is greater than 2.5 on the National Petroleum Association scale. Dirty products usually require heating during a voyage, because their viscosity or waxiness makes discharge difficult at ambient temperatures.

• Drydocking

  The removal of a vessel from the water for inspection and repair of those parts of a vessel which are below the water line. During drydockings, which are required to be carried out periodically, certain mandatory classification society inspections are carried out and relevant certifications are issued. Drydockings are generally required once every 30 months or twice every five years, one of which must be a Special Survey.

• Gross tonne

  A unit of measurement for the total enclosed space within a vessel equal to 100 cubic feet or 2.831 cubic meters.

• Hull

  Shell or body of a ship.

• Handy products tanker

  A tanker with capacity ranging from 27,000 to 37,999 dwt.

• Intermediate Survey

  The inspection of a vessel by a classification society surveyor that takes place 24 to 36 months after each Special Survey.

• IMO

  International Maritime Organisation, a United Nations agency that issues international standards for shipping.

• Lube oil (or Lubricating oil)

  Selected fractions of refined petroleum or other oils used to lessen friction between moving surfaces.

• Lubricant

  A substance such as oil that reduces friction when applied as a surface coating to moving parts.

• MR tanker

  A medium-sized tanker with capacity ranging from 38,000 to 54,999 dwt.

• Newbuilding

  A new vessel under construction or just completed.

• Oil products

  Refined crude oil products, such as fuel oils, gasoline and jet fuel.

• OPA

  The United States Oil Pollution Act of 1990.

• Off-hire

  he period in which a vessel is unable to perform the services for which it is immediately required under a time charter. Off-hire periods can include days spent on repairs, drydocking and surveys, whether or not scheduled.

• Product tanker

  A tanker designed to carry a variety of liquid products varying from crude oil to clean and dirty petroleum products, acids and other chemicals, as well as edible oils. The tanks are coated to prevent product contamination and hull corrosion. The ship may have equipment designed for the loading and unloading of cargoes with a high viscosity.

• Protection and indemnity insurance

  Insurance usually obtained through a mutual association formed by ship owners to provide liability indemnification protection from various liabilities to which they are exposed in the course of their business, and which spreads the liability costs of each member by requiring contribution by all members in the event of a loss.

• Special survey

  The inspection of a vessel by a classification society surveyor that takes place every five years.

• Sister ship liability

  A concept permitted by some jurisdictions whereby a claimant may arrest both the vessel that is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner.

• Single hull

  A hull construction design in which a vessel has only one hull.

• Scrapping

  The sale of a vessel as scrap metal.

• Spot market

  The market for the immediate chartering of a vessel, usually for single voyages.

• Time charter

  A charter under which the ship owner is paid on a per-day basis for a specified period of time. Typically, the ship owner is responsible for providing the crew and paying vessel operating expenses while the charterer is responsible for paying the voyage expenses and additional voyage insurance.

• Time charter equivalent earnings per day

  A measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating time charter equivalent earnings per day is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Time charter equivalent earnings per day is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed during specific periods.

• Tanker

  A ship designed for the carriage of liquid cargoes in bulk with cargo space consisting of tanks. Tankers carry a variety of products including crude oil, refined products and liquid chemicals.

• Voyage charter

  A charter under which a ship owner is paid freight on the basis of moving cargo from a loading port to a discharging port. The ship owner is responsible for paying both vessel operating expenses and voyage expenses. Typically, the charterer is responsible for any delay at the loading or discharging ports.

• Voyage expenses

  Expenses incurred due to a vessel’s travelling from a loading port to a discharging port, such as fuel (bunkers) cost, port expenses, agents’ fees, canal dues and extra war risk insurance, as well as commissions.

• Vessel operating expenses

  The costs of operating a vessel, primarily consisting of crew wages and associated costs, insurance premiums, management fee, lubricants and spare parts, and repair and maintenance costs. Vessel operating expenses exclude fuel cost, port expenses, agents’ fees, canal dues and extra war risk insurance, as well as commissions, which are included in “voyage expenses”.